Borrowers and occupational fraud – Who’s most vulnerable and how to assess risk
Abstract: The most recent of the Association of Certified Fraud Examiners’ biennial fraud studies indicates that the typical business continues to lose 5% of revenues to fraud — and financial institutions reported the most fraud cases. This article discusses the most fraud-prone industries and the kinds of fraud to which each is particularly susceptible. It also provides ten questions that lenders can ask to evaluate a company’s antifraud controls. A sidebar discusses how receivables, inventory and fixed assets can serve as red flags to warn lenders of fraud, which can impair the victim’s ability to service debt and can lower its collateral values.